Social Housing Regulation Bill, Second Reading, House of Lords, 27 May 2022

It will be important that any new requirements or responsibilities for councils align with proposals being brought forward in both the Fire Safety Act and the Building Safety Act and are fully funded.


Key messages

  • Councils are determined that tenants should have the security of a safe and well-maintained home with any issues quickly and satisfactorily addressed. The majority of social housing landlords are responsible and provide high quality homes for people to live in.
  • We welcome proposals that will strengthen the role of the Regulator to increase the rights of tenants and enable tenants to better hold their landlord to account on consumer issues. It will be important that any new requirements or responsibilities for councils align with proposals being brought forward in both the Fire Safety Act and the Building Safety Act and are fully funded.
  • The LGA continues to support councils to improve their housing management services and engagement with tenants through the delivery of a social housing management peer challenge and promotion of best practice, as part of our sector-led improvement offer.
  • We will want to work with the Government and the Regulator to ensure that there is a proportionate, risk-based approach to inspection, as well as urgent clarity on how this will be delivered and funded. A sector-led improvement approach through use of peer reviews and performance benchmarking, could provide a complementary, or even an alternative approach to inspection.
  • Further clarity would be welcomed on the proposal to enable the Regulator to act more quickly and take action where it has concerns about the decency of a home. Social housing landlords should be allowed to and supported to manage their own journey on continuous improvement, with the Regulator’s activity prioritising intervention with landlords that are experiencing the most severe challenges. This approach would make best use of limited resources for both council landlords and the Regulator.
  • We would welcome the publication of guidance on the Regulator’s requirements and timescales for preparing and implementing Performance Improvement Plans (PIPs) and expect this measure to be used prior to the use of punitive measures by the Regulator to give non-compliant landlords the opportunity to improve their performance.
  • We would like to better understand the reporting mechanisms in place which will act as the link between the lead and the Regulator on health and safety issues, and expect the Government to make sufficient new burdens funding available to enable councils to implement this new duty.
  • At present, there is a £5,000 cap on fines that the Regulator can impose on social landlords. The Government must consider carefully the implications of removing the cap. Fines on council landlords would in effect end up being paid for, at least in part, out of tenants’ rents, to the detriment of local service provision – they should only be used as a last resort.

Advisory Panel

Clause 2

  • Requires the Regulator to set up an Advisory Panel.
  • The panel will include registered providers; councils; social housing tenants; the Greater London Authority; and Homes England. The Regulator may appoint other people and organisations.
  • The purpose of the panel is to provide the Regulator with information and advice on issues relating to social housing regulation that could have a significant impact on social landlords or the provision of social housing.

LGA view: Councils are determined that tenants should have the security of a safe and well-maintained home with any issues quickly and satisfactorily addressed. Therefore, an Advisory Panel, which allows the sector, including tenants, to proactively inform the Regulator on a range of issues in relation to regulation is a welcome step. It is good that the panel will comprise of a range of stakeholders in the sector, and we believe this measure will enable tenants to better hold their landlord to account on consumer issues.

We want to work with the Government to ensure that the panel is a success and to assist with developing a terms of reference. It is vital that the membership comprises a diverse range of councils to ensure that consumer issues across the sector are represented.

Surveys

Clause 22

  • The Regulator will have the power to undertake a property condition survey (i.e an inspection) more quickly than at present. It will only have to give landlords 48 hours notice, which is reduced from the current period of 28 days.

LGA view: While it is good that the role of the Regulator is being strengthened, a new, and more robust inspection regime should only be part of the solution to improve quality standards. It must be supplemented by reform of the Housing Revenue Account (HRA), or the necessary grant-funding, to enable councils to deliver competing financial priorities emanating from national policy, while also being able to invest in social housing to improve and maintain quality standards.

Councils must be allowed to and supported to manage their own journey on continuous improvement. To support this principle and to supplement the Regulator’s inspection programme, through our improvement programme we have commissioned and piloted a Social Housing Management Peer Challenge to support councils to improve the service provided to tenants and support readiness for the emerging consumer regulation regime.

The Regulator’s activity should prioritise intervention with landlords that are experiencing the most severe challenges. We want to work with the Government and the Regulator to ensure that there is a proportionate, risk-based and an outcomes-focussed approach to inspection. Risk-based regulation would make best use of limited resources and funding for both council landlords and the Regulator.

 

Performance Improvement Plans

Clause 23

  • The Regulator will have the power to require a registered provider to prepare and implement a Performance Improvement Plan (PIP) when regulatory standards are not met.
  • The stated intention is to improve landlord performance and service delivery for the benefit of tenants ahead of any further enforcement action.
  • Registered providers can appeal, and tenants can request to see copies of PIPs

LGA view: We would welcome the publication of guidance on the Regulator’s requirements and timescales for preparing and implementing PIPs. We would expect this measure to be used prior to the use of punitive measures by the Regulator to give non-compliant landlords the opportunity to improve their performance.

We would also welcome a focus by the Regulator on the reasons why landlords are non-compliant and for the Regulator to support councils to remedy this as part of the PIPs. Failure to comply with quality standards may be due to challenges relating to financial capacity, which may force councils to make trade-offs to their services. It is therefore vital that the Government prioritises reforms that remove the financial constraints on councils including the ability of councils to retain 100 per cent of receipts from the sale of homes under the Right to Buy scheme, with no restrictions on their use; and reform social rent policy to allow a longer period of annual rent increases for a minimum period of at least 10 years.

Emergency Remedial Action

Clause 24

  • Following a property condition survey, the Regulator will have the power to carry out emergency works on the property if standards are not met, which in turn causes an imminent risk of serious harm to the health and safety of anyone living there.
  • Landlords will be required to pay emergency remedial action within 28 days of the works.

LGA view: The majority of social housing landlords are responsible and provide high quality homes for people to live in, with 94.3 per cent of homes meeting the Decent Homes Standard (compared to only 76.7 per cent in the private rented sector), councils are rightly proud of their record. However, there are a small number of exceptions where the quality of accommodation must be improved. We therefore welcome the power of the Regulator to require emergency remedial action, specifically in circumstances that warrant its use and as a last resort to remedy imminent serious health and safety risks.

We are committed to working with the Government; the Regulator; and councils through our sector-led improvement programme to improve their housing management service and, as far as possible, prevent the need for this measure. But if the Government is serious about reframing the role of Regulator to be proactive and intervening to regulate landlords at an earlier stage, then we would expect the likelihood of this measure being used to be reduced.

Further, to reduce the risk that emergency remedial action is required, it is critical that the Government reforms the HRA or provides councils with the necessary grant-funding. This will ensure that councils can balance their HRA, while simultaneously being able to invest in their stock to improve quality standards alongside the delivery of other national policy commitments.

Fuel poverty is on the rise as a result of the cost of living crisis and increasing energy costs will further hit households in the months ahead. We need urgent efforts to decarbonise energy and insulate homes, to make households more resilient to rising energy costs, particularly in the winter months.

The Government must therefore provide the appropriate amount of investment to kick-start an energy revolution in social housing and enable councils to deliver deep energy retrofit and roll out innovative renewable technology to upgrade housing stock to the benefit of residents. One solution would be to bring forward the £3.8 billion Social Housing Decarbonisation Fund to help the rollout of an ambitious national retrofit programme across all tenures. This would enable councils to have a larger, more meaningful impact to meet net zero targets at a faster pace and help tackle fuel poverty.

Electrical Safety Standards

Clause 10

  • Extends the duty to comply with certain electrical safety standards which currently applies to private landlords, to the social housing sector (i.e. all residential properties let by landlords).
  • This includes mandatory checks on electrical installations at least every five years and mandatory portable appliance testing (PAT) on all electrical appliances that are provided by social landlords.

LGA view: The extension of mandatory, periodic checks on electrical installations to the social housing sector is a positive step that will help tenants to feel safe and secure in their home. We would expect the Government to undertake a review of the additional resourcing requirements placed on the social housing sector as a result of this new measure, and for councils to be sufficiently funded through new burdens. We look forward seeing the detail for how this new measure should be implemented including the specific duties on councils, the expertise expected of any persons that undertake such checks and what standards must be adhered to.

Appointment of Health and Safety Lead

Clause 9

  • Every registered provider must designate, in line with certain criteria, a person to act as a health and safety lead.
  • The person would lead on certain functions relating to the provider’s compliance with its health and safety obligations towards tenants, although legal responsibility for ensuring compliance with relevant health and safety obligations would remain with the registered provider.
  • It will be incumbent on the provider to ensure that the lead has the authority, capacity and resources to carry out their role.

LGA view: We would expect the Government to make sufficient new burdens funding available to enable councils to implement this new duty. We look forward to working with the Government to implement this measure and the publication of guidance for the criteria of the role. In particular, we would like to better understand the reporting mechanisms in place which will act as the link between the lead and the Regulator on health and safety issues. Overall, we believe this measure is aligned to the principle of proactive regulation and will foster joint working between councils and the Regulator.

Removal of the Serious Detriment Test

Clause 20

  • The removal of the Serious Detriment test, which blocks the Regulator from intervening over consumer standards unless it suspects tenants are at risk of serious harm.

LGA view: We support the removal of the Serious Detriment Test, which we have lobbied for previously. This will enable the Regulator to act more quickly and take sufficient action against providers, when it has concerns about the decency of a home, regardless of the level of harm. However, we do believe that the Regulator should prioritise intervention with landlords that are experiencing the most severe challenges.

Regulatory and Enforcement Powers – Penalties

Clause 23, Schedule 3

  • At present, there is a £5,000 cap on fines that the Regulator can impose on social landlords. This cap will be removed, and the Regulator can issue an unlimited fine to social landlords.
  • The stated intention is to give the Regulator flexibility to determine the appropriate level of penalty depending on the circumstances.

LGA view: The Government must carefully consider the implications of removing the cap. Fines on council landlords would in effect end up being paid for, at least in part, out of tenants’ rents, to the detriment of local service provision – they should only be used as a last resort. We would welcome further information on the circumstances in which a financial penalty would be placed on councils; and in the interest of transparency, also the mechanism that will be used by the Regulator to determine the appropriate level of the fine.

Alongside this measure, we would like to see an approach that seeks to understand the blockages to compliance that councils may be facing and seeks to resolve them. This will ensure that a balance is struck between tackling the symptoms and the causes of non-compliance.

Housing Ombudsman Scheme

Clause 31

  • This will empower the Ombudsman to issue a complaint-handling order against poor performing landlords.
  • The stated purpose of the order is to prevent the recurrence of identified issues and enabling a timely progression of complaints at local level, as well as the process being accessible and consistent.

LGA View: We welcome measures that will improve and strengthen the role of the Ombudsman in dealing with complaints. It is an encouraging step that measures which will facilitate a quick resolution of complaints are being implemented. However, it is imperative that this new power genuinely achieves better outcomes for tenants and social landlords, and we would also welcome a strong focus on how safety concerns are raised and addressed. We have worked with the Ombudsman to disseminate publications on the outcomes of investigations to local authorities to promote learning and lessons for service improvement in the sector; and we will continue to work with Ombudsman to implement the reforms going forward.

Contact

Katharine Goodger, Public Affairs and Stakeholder Engagement

katharine.goodger@local.gov.uk